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how does credit card fraud work
Dangers Of Credit Cards And Unsecured Loans
Unsecured loans and credit card borrowing can be expensive. Credit card interest rates are steep. Many cards offer low introductory rates for the first six months, but raise the rate thereafter. Even many of the so-called low interest credit cards charge double-digit interest rates at a time when your bank offers only 3 percent on your savings account. Many cards charge as much as 21 percent, especially merchant credit cards. Many charge an additional annual fee, plus service charges for cash advances.
Paying off credit cards can take years. Most people don't realize just how much the interest compounds over time. For example, even if you make the minimum monthly payments on a balance of $1,000 with an interest rate of 18 percent, you could be making payments for almost 10 years.
Credit card companies often grant more credit than the consumer is able repay. Although interest rates are high, credit cards remain attractive to many borrowers because of their low required minimum monthly payment. Borrowers thus feel secure charging large amounts because they can make at least the minimum payment.
Unsecured loans, such as payday loans, can also be very costly. Payday loans are deferred-deposit loans, whereby a lender will accept your post-dated check in exchange for cash on the spot. Fees can be very steep, often as high as 10 percent of the amount of the check. A $500 check could cost $50! Many people find themselves living paycheck to paycheck on these types of loans, and falling deeper and deeper in debt. Yes, they can be very convenient when used for emergencies and sparingly. Just don't fall into a trap.
So, never charge or borrow more than you reasonably believe you can pay off within three to four months. Pay off balances as soon as possible, even if you have to use your savings to do so. Your savings earn only about 3 percent in a savings account. Your credit cards may charge as much as 21 percent interest. If you use your savings to pay off your credit cards, you net an 18 percent gain. So, borrow wisely and strive to be debt free when you retire.
About the Author : Chris Robbins is the founder of http://www.directlendingsolutions.com your source for bad credit loans and mortgage information.
More Useful Resource and Updates on how does credit card fraud work
- QCR Holdings, Inc. Announces Gain From the Sale of Merchant Credit Card Acquiring Business (GlobeNewswire via Yahoo! Finance)
MOLINE, Ill., Aug. 29, 2008 -- QCR Holdings, Inc. announced today that the Company has sold its Merchant Credit Card Acquiring business to Veracity Payment Solutions, Inc. . The transaction will result in an after-tax gain of approximately $3.0 million in the third quarter of 2008.
- Man arrested for using dead grandma's credit card (Deseret Morning News)
Police arrested a man who they say bought gas with a credit card sent to his deceased grandmother's estate.
- Man Sentenced for Stealing Credit Card Numbers 8/29/08 (CBS 7 West Texas)
A 20-year-old Pecos man accused of stealing credit card numbers at three local restaurants was sentenced to two years in prison. Gonzalo Reyna was found guilty of credit card fraud and aggravated identity theft.
- Pleasant Grove police crack theft and credit-card-fraud ring (Deseret Morning News)
Police officers have cracked a theft and credit-card fraud ring, leading to the recovery of thousands of dollars of stolen items ranging from plasma TVs to underwear.
- Secured card can help you build credit (Bankrate.com via Yahoo! Finance)
A secured credit card can help rebuild your payment history if you have bad credit, says Dr. Don Taylor.
- Analysts weigh credit card impact of Biden VP bid (ABS-CBNNEWS.com)
DENVER - Credit card industry analysts are wary of the sector's regulatory outlook if Barack Obama, a harsh critic of their business, becomes U.S. president with their longtime ally Joe Biden as vice president.
- Home Depot gets credit card boost from Citigroup (Atlanta Journal-Constitution)
Home Depot, which has one of the largest consumer credit card portfolios in the country, has penned a new deal with its outside credit vendor, Citigroup Inc., the world's largest card issuer. The deal may seem like inside baseball. But it's a big deal for the country's second-largest retailer, as the cost of maintaining the portfolio under the old agreement was depressing earnings. The new deal ...
- Crime Stoppers offers reward in credit card abuse case (The Atascocita Observer)
On June 4, an unidentified suspect broke into a woman?s vehicle and took her purse, which contained several credit cards. When the victim called to cancel her cards, she was informed that her Visa card had already been used twice.
- Brazen credit card theft leads to conviction (The News)
NEW?GLASGOW ? A 25-year-old woman who stole John Hamm?s credit card from church and worked with her common-law partner to steal a purse from an elderly lady in Stellarton has been sentenced to probation.
- Cuomo calls on gas stations to stop surcharges on credit card customers (The Journal News)
ALBANY - Attorney General Andrew Cuomo is warning gas stations across the state not to engage in "bait-and-switch" tactics by posting lower cash-only prices for gas and then charging higher prices for credit card customers.
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